NEW DELHI: At a time when dealers are in trouble and many are shutting shops due to tightening lending norms, weakening sales and contracting margins, most of Toyota Kirloskar Motor dealers manoeuvring the crisis much better their peers.

Moreover, when many dealers of Nissan, Hyundai, Tata, Mahindra & Mahindra, and Maruti Suzuki shut their shops, TKM claims their dealers were the ones which did not report a single casualty.

Some may argue that the carmaker has big-ticket vehicles like Innova and Fortuner which help the dealers to stay fit. But this reason can be countered with the volumes of Hyundai and Maruti Suzuki.

For Example, Maruti Suzuki Dzire alone generates the same amount of revenue which Innova generates for Toyota Kirloskar Motors.

It is to note that that Maruti Suzuki sells 20,000 – 22,000 of Dzire (on an average in good market condition), while Toyota sells only 5,000-6,000 units of Innova.

He lists out starting from the selection of dealers to inventory financing & management to financial viability, manpower hiring, and succession planning. The carmaker is involved at every stage and takes regular updates and data-driven decisions.

In his presentation, he stated, “We are very careful in adding dealers. For us, dealers are for a long-term relationship. In 2014 we had 72 dealer principals and right now we have 80 of them, thus the carmaker did not add more than one or two dealerships every year. This deals with a major issue of over dimerization and gives network partner explore full potential.

On average our dealers have more than 4 outlets.

At present, only 4 percent sales come from online but with a target of 10% online sales, the company is looking at compact showroomsN Raja, Deputy MD, TKM and Chairman Lexus India

The carmaker is also closely tracking online sales. At present, only 4 per cent sales come from online but with a target of 10% online sales, the company is looking at compact showrooms and getting them to accessible locations.

Apart from this, for dealer viability, the company has taken initiatives like express maintenance and mobile service. Also, focusing on rural outlets which have been the tier 2 and tier 3 locations.

N Raja also touched upon a pertinent issue of a smooth succession planning.

“We have started this (succession) process two-three years back. Today 18% of our dealers are more than 60 years. Please don’t misunderstand I am saying my dealer principal to sit at home, he becomes a chairman, but we want somebody else to do the working,” he said.

In North America, in moving dealership business from the first generation to the second generation, the success rate is less than 30 per cent. The number further goes down to 10% when the dealership business goes from the second generation to the third generation.

Indicating that “We take a lot of learnings from the global market. We don’t want that to happen because in India its large family-led business and how do we work on. S,” said N Raja.

At Toyota dealers, the succession plans start as soon as the dealer principal reaches the age of 55 years.

“The dealer has a right to recommend but we have the right to veto it. We develop the person so that he comes in line for our succession plan. If it moves professional, then we have the plans for that also. So that is one of the important areas where a lot of focus is and we have moved in that direction, five-six dealer principal activities have started, and we have come to solutions.” said N Raja.

On recruiting manpower, TKM has a consultancy which helps its 80 dealers. The consultancy works with the dealerships, understands what the core values and strengths are and make questionnaires suitable to identify the potential candidate who can stick along.

Our dealer stocks are 15 days plus transit day and the fund requirement would cover the market of seven days on saleN Raja, Deputy MD, TKM, and Chairman Lexus India

Moreover, there are 80 kinds of questions for dealer principals to look at in the selection process. It also does manpower dealer partnership program which is especially taken by CEOs and Dealer Principal.

In terms of inventory funding, Toyota follows a unique approach as it review fund requirements on a half-yearly basis. N Raja adds, “Our dealer stocks are 15 days plus transit day and the fund requirement would cover the market of seven days on sale. This is what we fix, and we are transparent with it to all our finance parties.”